GS Caltex shut its new cracker in Yeosu for scheduled turnaround

GS Caltex shut its new cracker in Yeosu for scheduled turnaround

MOSCOW (MRC) -- South Korea's GS Caltex has shut its new mixed-feed cracker at Yeosu for maintenance on 27 August, 2021, reported S&P Global with reference to a company source.

This cracker is expected to resume operations on 7 September, 2021, after the turnaround is complete.

The new steam cracker, which was started around June 18, can produce 750,000 mt/year of ethylene and 410,000 mt/year of propylene.

As MRC informed before, this June, the company also started up its new high density polyethylene (HDPE) in Yeosu with an annual capacity of 500,000 tons/year that would concentrate on producing the film (TR-144, TRB-115), blow molding (5520BN or BM593), and injection (6060 or 6060UV) grades.

The company also operates 180,000 tons/year polypropylene (PP) plant at the same complex.

The project is a 50-50 joint venture between GS Energy Corp. and Chevron Corp., costing 2 trillion won (USD1.84 billion) that started construction work in 2019.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
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COVID-19 - News digest as of 02.09.2021

1. Crude oil futures down in Asia amid larger-than-expected US crude draw

MOSCOW (MRC) -- Crude oil futures settled lower during mid-morning trade in Asia Sept. 2, as the market was weighed by a larger-than-expected US crude draw against rising OPEC+ output, reported S&P Global. At 10:40 am Singapore time (0240 GMT), the ICE November Brent futures contract was down 35 cents/b (0.49%) from the previous close at USD71.24/b, while the NYMEX October light sweet crude contract was 43 cents/b (0.63%) lower at USD68.16/b. The OPEC+ alliance in its meeting Sept. 1 agreed to increase crude output by 400,000 b/d scheduled for October, which is also aligned with its current easing policy. "The alliance rubber stamped a previously announced 400,000 b/d increase at its monthly meeting, with very little resistance from any members. The decision was ultimately backed by a series of data which suggest the market remains tight," said ANZ research in a note Sept. 2.

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Crude oil futures down in Asia amid larger-than-expected US crude draw

Crude oil futures down in Asia amid larger-than-expected US crude draw

MOSCOW (MRC) -- Crude oil futures settled lower during mid-morning trade in Asia Sept. 2, as the market was weighed by a larger-than-expected US crude draw against rising OPEC+ output, reported S&P Global.

At 10:40 am Singapore time (0240 GMT), the ICE November Brent futures contract was down 35 cents/b (0.49%) from the previous close at USD71.24/b, while the NYMEX October light sweet crude contract was 43 cents/b (0.63%) lower at USD68.16/b.

The OPEC+ alliance in its meeting Sept. 1 agreed to increase crude output by 400,000 b/d scheduled for October, which is also aligned with its current easing policy.

"The alliance rubber stamped a previously announced 400,000 b/d increase at its monthly meeting, with very little resistance from any members. The decision was ultimately backed by a series of data which suggest the market remains tight," said ANZ research in a note Sept. 2.

A note from ING research analysts Sept. 2 also pointed out that while OPEC+ acknowledges that there is still plenty of uncertainty related to COVID-19, they believe that fundamentals will continue to improve.

During their discussion, OPEC+ ministers reviewed an internal forecast that indicated global oil demand would far exceed supply through the rest of the year, by 1 million b/d in September, 1.1 million b/d in October, 800,000 b/d in November and 400,000 b/d in December. The group is next set to meet on Oct. 4.

Meanwhile, data from the Energy Information Administration showed US crude inventories fell by 7.2 million barrels to 425.4 million barrels for the week ending Aug. 27, bringing inventory levels to roughly 6% below the five-year seasonal average. Over the same period, gasoline stocks also rose by 1.3 million barrels to about 2% below the five-year seasonal average, while distillate stocks fell by 1.7 million barrels to about 9% below the five-year seasonal average.

Data released from the American Petroleum Institute showed a draw of 4.05 million barrels in US crude inventories for the week ending Aug. 27, far greater than the 1.62-million-barrel dip indicated in the previous week. The API report also showed gasoline inventories growing by 2.71 million barrels for the week ending Aug. 27, while distillate stocks dropped by 1.96 million barrels over the same period.

As MRC informed previously, crude oil stockpiles fell modestly in early August, while gasoline inventories dipped to their lowest level since November, according to the US Energy Information Administration. Crude inventories fell by 447,000 barrels in the week to Aug. 6 to 438.8 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop. Overall crude inventories have been on the decline for several weeks due to increased demand.

We remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
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Ufaorgsintez partially shut its LDPE production, PP production to be shut soon

Ufaorgsintez partially shut its LDPE production, PP production to be shut soon

MOSCOW (MRC) -- Ufaorgsintez (petrochemical asset of Bashneft, which is part of Rosneft) has begun a gradual shutdown of some of its low density polyethylene (LDPE) production capacities for a scheduled maintenance. The plant's polypropylene (PP) production will be taken off-stream soon, according to ICIS-MRC Price report.

The plant's clients said Ufaorgsintez began a gradual and planned turnaround at its first LDPE line (108 grade polyethylene - PE) on 1 September. The outage of the first PE line will be short and will take about two weeks. It should be noted that the plant's PP production will be shut down for a scheduled maintenance on 3 September.

It is also worth noting that Kazanorgsintez will begin a sequential shutdown at its PE production capacities for scheduled repairs on 10 September. The plant's LDPE and high density polyethylene (HDPE) production capacities will be taken off-stream.

Ufaorgsintez's overall LDPE and PP production capacities are 90,000 and 120,000 tonnes per year, respectively.

PJSC Ufaorgsintez produces phenol, acetone, synthetic ethylene-propylene rubber, high and low pressure polyethylene, polypropylene, more than 30 types of petrochemical products and over 25 consumer products.
MRC

Canada pushes to stimulate two major new carbon capture projects by 2030

MOSCOW (MRC) -- Canada is pushing to provide incentives for at least two new massive carbon capture projects by 2030, a federal government document showed, with nearly a dozen oil and gas companies already pursuing rights to store carbon dioxide in Alberta's vast underground caverns, said Hydrocarbonprocessing.

The hubs to collect carbon from clusters of emitters would advance Prime Minister Justin Trudeau's goal of cutting emissions by 40-45% from 2005 levels by 2030. The global oil industry is betting heavily that carbon capture utilization and storage (CCUS) can become a multi-billion-dollar global business with government and private investment.

To encourage private investment in CCUS projects, Canada is counting on its carbon price, which is set to rise to CD170 (USD134.8) per tonne of carbon by 2030 from CD40, a planned tax credit, and its Clean Fuel Regulation (CFR), which requires lower emissions intensity in fuel.

The cost of building the projects, and their locations, are not yet known. The two carbon storage hubs would be planned or under construction by 2030, with Canada sequestering at least 15 million tonnes of carbon annually by that year in total, according to the Natural Resources Department's draft CCUS strategy, obtained by Reuters after it was shared privately in July with industry stakeholders.

"The big takeaway is the federal government is pretty serious about CCUS," a Calgary oil industry source said. Canada's four existing projects, representing 15% of global facilities, currently capture 4 million tonnes per year, according to the Canadian government.

Canadians vote for a new federal government on Sept. 20. On Sunday, Trudeau said he would cut oil and gas sector emissions based on five-year targets starting in 2025. His Liberal party is in a tight race with the Conservatives, a party that also supports carbon capture and has promised to introduce a tax credit to encourage investment.

The Natural Resources Department is doubtful whether its incentives will be enough to stimulate widespread adoption. "It is not yet clear whether this elevated pricing signal, combined with other federal policies yet to be implemented, such as the CFR and the investment tax credit announced, will be sufficient to drive widespread CCUS adoption," the federal strategy said.

The government's doubts highlight challenges such as high costs and complex technology required to capture carbon.Natural Resources Minister Seamus O'Regan could not be immediately reached. In September, Alberta is expected to call for expressions of interest to store carbon underground, with formal project selection next year, according to two sources familiar with the process.

Alberta already has received informal interest from at least 10 groups, including publicly announced projects involving Royal Dutch Shell, TC Energy and a consortium of the five biggest Canadian oil producers, said David Knight Legg, board advisor to economic development agency Invest Alberta.

Many global oil and gas producers see CCUS as a way to prolong their capacity to produce fossil fuels, by locking away their emissions. A massive expansion of carbon sequestration facilities is vital if the world is to reach net-zero emissions by 2050, according to the International Energy Agency (IEA), from around 40 million tonnes a year currently to 7.6 billion tonnes.

Julia Levin, program manager at Environmental Defence, called CCUS a "dangerous distraction" from transitioning to cleaner sources of energy. "It's been five decades of huge amounts of resources, research, public and private investment and we have a global capacity to capture 0.1% of emissions from the fossil fuel sector," she said.

IEA research suggests storing carbon deep underground is safe and stable. However, the pipelines required to transport carbon to injection sites need to be monitored to mitigate the risk of ruptures. One industry source said dozens of oil and gas companies are considering projects, awaiting details of Alberta's competitive process.

Jennifer Henshaw, spokeswoman for Alberta's energy minister, said the government is still developing the competitive process. Analysts say hubs are the most economic way to store carbon. Alberta is a rare place where suitable geology, a cluster of high emitters and government regulation are all in place, said Neeraj Nandurdikar, global head of power and renewables consulting at Wood Mackenzie.

Hubs make sense because the more carbon they sequester, the lower costs will be, said Tim McKay, President of Canadian Natural Resources, Canada's biggest oil producer. Some smaller oil producers warn that hubs could stymie their plans to inject carbon close to their operations, many in remote regions.

Whitecap Resources, an oil producer that already stores carbon, will propose to Alberta that it manage underground space for small producers that want to inject their carbon locally, CEO Grant Fagerheim told Reuters. Whitecap could sequester 6 million tonnes of carbon per year under the proposal, triple what it currently buries, he said.

Michael Belenkie, head of Advantage Energy's Entropy unit, a company making modular carbon capture technology, said Alberta needs to prevent speculators from securing underground space, which would kill off CCUS projects.

As per MRC, Canada has joined the Ellen MacArthur Foundation's global network of plastics waste reduction project. About forty players, including businesses, politicians, government and non-governmental organizations, have joined the pact to work to create a circular economy for the Canadian plastics industry.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
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